What is XML invoicing? (Everything you should know)

An XML invoice is an e-invoice sent as an XML file - a structured file format that is platformed-independent and readable by humans and machines.

Invoicing is an essential process for any business. It helps keep track of money owed and paid and records the transactions for future reference.

With the world moving from traditional paper invoices to e-invoices, you’ll come across different e-invoicing lingo. One of them is XML invoicing.

In this blog post, we'll explain everything you need to know about XML invoicing. We’ll discuss what XML invoicing is, how it works, and what its benefits are.

So if you're looking for a crash course on XML invoicing, read on!

What is XML invoicing?

An XML invoice is an e-invoice sent as an XML file (with the invoice data stored in the tags of the file). Thus, XML invoicing is a form of e-invoicing that uses Extensible Markup Language (XML) to send and receive invoices.

An XML file is a structured file format designed to be platform-independent and readable by both machines and humans.

So, XML invoicing ensures that the data is structured and can be easily processed by computers. It also allows you to share information between different applications and systems easily.

By using XML invoicing, businesses can easily send and receive invoices electronically without worrying about compatibility issues.

What is e-invoicing?

E-invoicing (or electronic invoicing) is the process of sending and receiving invoices electronically rather than through the mail.

There are several different methods of e-invoicing, including:

Structured Data Transmission (SDT)

SDT is a method of e-invoicing that uses a standardized format to send invoices between businesses. Examples include:

XML invoicing
EDI invoicing: EDI (Electronic Data Interchange) is a technology for exchanging business documents electronically. It is often used in supply chain management and is considered the most reliable and secure way to exchange invoice data. Some common EDI standards are EDIFACT, ANSI, and ebXML.

Unstructured Data Transmission (UDT)

UDT is a method of e-invoicing that uses a non-standardized format to send invoices between businesses.

The invoices are usually human-readable but not machine-readable (i.e., a computer can’t extract and process the data directly).

UDT invoicing is often less reliable and secure than SDT, as it can be difficult to exchange data between different systems. Examples include:

PDF invoicing: PDF is a common format for sending and receiving documents electronically. It is a popular choice for e-invoicing because it is easy to use and compatible.
Email Invoicing: Email invoicing is the process of sending and receiving invoices via email. It is the most common, simple, and cost-effective method of e-invoicing.
Word Format: Word format is a Microsoft Word document that you can use to send and receive invoices electronically.

Hybrid Invoice

Hybrid invoicing is a method of e-invoicing that uses a combination of different formats, such as XML and EDIFACT, or having a PDF invoice with XML data embedded into it (e.g., ZUGFeRD).

In such a case, all the invoice data in XML format must be available in PDF format.

Hybrid invoicing allows businesses to take advantage of the best features of each technology while still maintaining compatibility with other systems.

You may also like: E-invoicing: Everything You Need To Know.

What is the purpose of XML e-invoicing?

The purpose of XML e-invoicing is to provide a standard way for businesses to send and receive invoices electronically.

By using XML, companies can avoid the hassle of dealing with compatibility issues and can easily share invoicing data between different applications and systems.

Specific reasons why most businesses use XML e-invoicing include the following:

1. Readability

XML is a standard format where programs can automatically read the values in the invoice fields. The program can then process the invoice, e.g., verification and other tasks.

2. Compatibility

E-invoicing service providers inter-operate with other service providers. And XML is a widely used format, so most available systems are compatible with XML, making it a popular choice for businesses that need to exchange data with other parties.

3. Efficiency

XML invoicing is a fast and efficient way to send and receive invoices electronically. It eliminates the need to print and mail invoices, saving your business time and money.

4. Security

XML invoicing is a secure way to send and receive invoices electronically. It helps to protect against data theft and fraud and ensures that confidential information is not compromised.

5. Compliance

XML invoicing is a compliant way to send and receive invoices electronically. This means that it meets the regulatory requirements for invoicing and is suitable for businesses of all sizes.

What is the XML invoice format?

The XML invoice format is a standard for formatting electronic invoices. It defines the structure and content of an invoice, allowing it to be easily shared between different applications and systems.

The XML invoice format is based on the XML schema definition (XSD), which defines the structure and content of an XML document.

XML invoice examples

An XML invoice is essentially an invoice saved using an XML file, so it contains XML codes and ends with the file extension “.xml.”

XML invoices contain plain text and tags. The plain text is the data to be stored, while the tags indicate what the data is.

Below is a skeletal example of an XML invoice:

The XML invoice example above shows plain text in red and tags in black. Each tag represents a type of data, such as “invoice number,” “date,” “first name,” “last name,” etc.

Tags tell the computer what to do with the data inside it. They are strictly for the computer (Users do not see tags. Only the computer does).

When viewing the actual invoice, users will see plain text. So, the XML invoice example above will come out to users as below:

How does XML e-invoicing work?

XML e-invoicing works by using XML to format invoices into an electronic document. The following are XML schemas design guidelines:

Use a root element to enclose all the data in the invoice
Use a header element to identify the invoice
Use a body element to contain the invoice data
Use child elements to represent the different parts of the invoice
Use attributes to identify the data elements

How to create an XML invoice?

Creating an XML invoice is a simple process that you can do using any text editor or word processor. The following steps outline how to create an XML invoice:

Start by creating a new document and saving it as an XML file using a text editor such as Notepad or Word.
Next, define the root element for your invoice. This top-level element will contain all the other elements in your document. You can name the root element anything you like, but it is typically called "invoice."
Now, add the header information for your invoice. This includes the invoice number, date, customer name, and other relevant information.
Next, add the lines for your invoice. Each line should include the item number, description, quantity, unit price, and total amount.
Finally, add the footer information for your invoice. This should include the total amount, terms of payment, and other relevant information.
Save your document and submit it to the recipient.

Most businesses are adopting hybrid invoicing formats such as ZUGFeRD/Factur-X. Therefore, you may find it easier to send your invoices through a service provider who converts your invoice into the recipient’s desired format.

How to read XML invoices?

Reading an XML invoice is a simple process that can be done using any text editor or word processor. The following steps outline how to read an XML invoice:

Right-click on the XML file and select "Open with" from the menu.
Select an application from the list that can open XML files, such as Notepad or Word.
The application you choose will display the contents of the XML invoice in the application.
Select 'File' > 'Print' from the menu to print the invoice.
The invoice will be printed on the application's default printer.
Select 'File' > 'Save As' from the menu to save the invoice.
Save the invoice as a PDF or XML file.

How can I download my invoices in XML format?

The specific steps for downloading your invoice in XML format depend on your e-invoicing provider.

However, the exporting XML invoice generally involves the following:

Login to your profile and go to the main dashboard
Find and select the invoice you want to export
Choose the document type you want for your download
Navigate to and click the appropriate button to start your download. The button’s name differs from provider to provider, but it’s mostly something like “Download XML” or Export XML.”
If redirected to a new page, click the appropriate button to finalize or complete your download.

Takeaway: Use Storecove to ensure efficient and compliant invoicing processes

XML invoicing is a form of e-invoicing that uses Extensible Markup Language (XML) to send and receive invoices.

Since an XML file is structured, platform-independent, and readable by machines and humans, XML invoicing ensures that data is structured, easily shared between different applications and systems, and easily processed by computers.

That is, XML invoicing is a secure, compliant, and efficient way to send and receive invoices electronically.

It saves you time and money and makes tracking and managing invoices easy. You can easily generate an XML invoice using a text editor or word processor and submit it to the recipient in an electronic format.

However, only a few businesses use the XML e-invoicing format. But intuitive e-invoicing solutions can help you improve your invoicing processes, ensuring regulatory compliance and seamless integration with customers.

Storecove’s e-invoicing solution is the ultimate in this regard, as it enables compliant e-invoicing in over 50 countries.

With Storecove, your invoices will be automatically converted into the format required by your recipients.

Need a solution for cross-border XML invoicing? Schedule a demo with one of our e-invoicing experts.

More information about XML invoicing?

Read also:

XML Invoice: What Is It? (Example and Formats)

What is XML invoicing?